The Investment Environment of The United Arab Emirates Tesla Motors The Investment Environment of The United Arab Emirates

Outline of topics Our Company The United Arab Emirates Brief History Operations Our Product in the UAE The United Arab Emirates Demographics Social, Political, and Economic Cultural Dimensions Auto Industry in the UAE Luxury Auto Market Our Competitors Culture of Auto Industry Tesla Products within the UAE Expansion Plan Mode of Entry Locations Infrastructure Strategic Alliance Considerations

Our Company

Tesla Motors 2003 - Tesla Founded Founders: Martin Everhard Marc Tarpenning 2004 - Joined by Elon Musk 2006 - First production car produced

Making Electric Cars without Compromises Tesla Motors Making Electric Cars without Compromises 2000 Chevrolet EV1 0-60: 8 seconds Max range: 100 miles Unavailable for purchase 2006 Tesla Roadster 0-60: 3.7 seconds Max Range: 200+ miles Cost: $130,000

Tesla Operations Freemont, CA – Production Factory Tilburg, Netherlands – Factory opened August 2013 Supercharger stations Showrooms

Our Product in the uae Model S Model X Seating for 7 Range of 300 miles Stylish and luxurious Model X All wheel drive Falcon doors

The united Arab Emirates

Demographics Population as of July 2013 Languages Religions 5,473,972 Languages Arabic (Official) English Farsi Hindi Urdu Religions 96% Muslim 4% Other (Christian & Hindu) Gender Comparison 2.19 Males per Female (2013 est.) Age Comparison 0-24 years: 34.4% 24+ years: 65.6%

Social Arabic & Islamic traditions Official language: Arabic Subtle variations between seven emirates Dubai Abu Dhabi Ajman Fujairah Sharjah Ras al-Khaimah Umm al-Qaiwain Official language: Arabic English is widely used 80% of population is non-Emirati High literacy rates for region 90% can read & write

Political President & Prime Minster National government Elected by Federal Supreme Council Seven emirs (hereditary monarchs) National government Emirates govern where national responsibility ends Flexibility to address local issues & concerns Constitution of the United Arab Emirates Various freedoms & rules of law Overseen by elected Federal Supreme Court Includes Sharia (Koran teachings) & civil courts

Economic Key industries Open economy 7th largest oil reserve Electricity production: 37th largest worldwide (2012, est.) 83.31 billion kWh GDP: 50th worldwide (2012, est.) Greater than $275 billion Inflation rate: 11th lowest in the world (2012, est.) About 0.7% Key industries Commercial Ship Repair Construction Materials Fertilizers Cement Aluminum Fishing Petroleum Petrochemicals Open economy Diverse & non-dependent on oil & gas, < 25%

Cultural Dimensions (Hofstede) Power distance (90) High inequality in power distribution Hierarchical based government Individualism (25) Relatively low score Loyalty to hierarchical rule More collectivist society Masculinity (50) More masculine society Homosexuality is illegal Distinct gaps in gender roles Uncertainty avoidance (80) Intolerant of unorthodox behavior Strong Islamic roots Long-term orientation (no score) Relatively new nation More sustainable future-orientation

the UAE is a good fit for tesla

auto Industry in the UAE

Our Industry Luxury car sales Growth in industry Arabian Automobiles Booming 2012 successful for luxury car manufacturers Growth in industry By 2017, expecting 9% growth Arabian Automobiles Increase of 25% in share price in 2012 Highest in last 5 years Tesla Model S

UAE Luxury Auto Market In 2012: 245,000 cars sold Increase of 25% over 2011 Projected for 2013: 370,000 vehicles, Increase of almost 38% Q1 of 2013: Audi: increase of 46% The Volkswagen Group: increase of 45% Jaguar Land Rover: increase of 25% Abu Dhabi Motors Rise in sales of 39% in Q1 Emirates Motor Company Rise in sales of 23% in Q1

Sustainable Competition KARMA FISKER BMW I3, HONDA JAZZ, NISSAN LEAF, ETC. Hybrid Only 80 miles Cramped Interior Slow Charging About $150K Economical Size Economical Features High Price Not Luxurious- Different Class Than Tesla Mitsubishi MiEV

Luxury competition ASTON MARTIN FERRARI MERCEDES BMW 3 SERIES Price averages $190K “Embarrassingly expensive & impractical” 7.3L v12 engine About 15 mpg About $400K “Stupidly expensive” No fuel efficiency 6L v12 engine About 14 mpg About $100K Priced too high Poor fuel efficiency About $100K Overpriced Feels more sporty than luxurious Poor fuel efficiency

Attributes of our product Single charge: range of 480 km Seat 5 adults & 2 children 2nd trunk under hood More room than station wagons 3g wireless connectivity Automobile magazine and motor trends 2013 car of the year The wall street journal calls it “simply amazing” Practical & Luxurious

Expansion Plan

Mode of entry First: Direct Exporting to Dubai Dubai Auto Zone Branch Office Foreign Sales Representative Marketing Strategy Brand Awareness Dubai Auto Zone 100% Ownership Tax Exemption Later: Foreign Direct Investment Dealerships Manufacturing Factory New or Existing Buildings Contract Manufacturing & Local Hiring

Locations First showrooms in Dubai near: Airport Downtown Mall Area Autodrome High End Residences Letter on Map Location A Dubai Airport B Dubai Mall C Autodrome

Building an infrastructure Two charges to get around four biggest cities Mercedes-Benz E63 AMG valued at $80,000 ($10,000 more) on one full tank Presence of superchargers will increase competitive advantage Cost of Installation: Home Charging: < $1,000 Charging stations: $10,000 to $40,000 per station Charger at gas station: $1,000 to $2,000 per charger Letter on Map Location A Dubai B Abu Dhabi C Al Ain D Muscat

Strategic alliance Opportunities UAE Government Electricity Generation Real estate Showrooms Superchargers Ptl Solar Encourage Purchase Reduce Costs for Consumers Sustainability

Negotiation Considerations Punctuality Time to Reach Agreement Appointments & Meetings Several Meetings Prayer Time “Fi Amanillah” When Escorting to Exit